Two Important Reasons to Buy Gold Now
The mainstream keeps telling us the economy is great. Unemployment is low. The stock market is high. There’s nothing to worry about. So, when we do express concern and argue that maybe things aren’t so great, the mainstream writes us off as contrarians or old-fashioned “gold bugs.”
Of course, there has been a certain negativity toward precious metals investing for years. as SRSrocco put it, “There’s a very interesting notion put forth by many commenters that the precious metals analysts and dealers are the frauds and charlatans, not Wall Street or the central banks. I imagine they believe this because gold and silver prices haven’t performed as forecasted or compared to the insanely inflated stock, real estate, and crypto markets.”
But no matter what they might think, there are important reasons to buy gold – especially now while everything is supposedly great.
SRSrocco recently outlined two important reasons to own gold and silver.
Gold Is an Insurance Policy
You wouldn’t leave your house uninsured. You wouldn’t leave your car uninsured. You shouldn’t leave your portfolio uninsured.
Precious metals function as an insurance policy against a financial meltdown or a currency crisis like we’re seeing in Venezuela today, where video game money is worth more than the bolivar.
For that reason alone, precious metals should be purchased on an ongoing basis just like most other insurance policies. While some of us have paid auto insurance without any accidents, we are sure glad we have it when one finally arrives.”
The staggering amount of debt in the world alone should give us all pause. The debt to GDP ratio in the US now stands at about 105%. Currently, the federal government is adding $4 of debt for every dollar in GDP growth. Despite what some people will try to tell you, the federal debt matters. And it’s not just the US. The entire world is drowning in debt. The debt to GDP ratio in Japan has risen to a staggering 253%.
Former director of the Office of Management and Budget David Stockman recently offered a pretty stark prediction about what’s ahead.
The whole predicate for this massively inflated bubble in the equity market is going to be pulled right out from under it. So, the problem starts in the bond pits, the problem originates out of Washington, and it’s going to spread very quickly from there into the equity markets around the world. So, we’ve got some pretty challenging and unprecedented financial pressures – I call it a collision coming not too far down the road.”
That seems like a pretty good reason to have a precious metals insurance policy, and it leads us to a second reason to own gold and silver.
Gold Will Protect Wealth When the Value of Most Stock, Bonds and Real Estate Disintegrate
Nearly a decade of easy money has blown up all kinds of asset bubbles, none bigger than the US stock market. Here’s the thing about bubbles. They eventually pop.
Peter Schiff has been saying the US stocks are already in a bear market. People just haven’t realized it yet.
SRSRocco turns to some technical analysis to underscore this point.
If the Dow Jones Index was in a bubble in 2007, it’s nearly twice the bubble today, and the MACD technical level shows it. I saw one of my Dow Jones charts on another website, and someone commented that the person who made the graph doesn’t understand the MACD technicals. Not only do I find this amusing, if true, people are in serious trouble if a RED WARNING LIGHT now means everything is okay. The Dow Jones Index took 16 months before it started to fall off a cliff in 2008. Watching the Index trade up and down in the 23,500-25,500 range reminds me of the same setup in 2007-2008. Markets just take time for REALITY to kick in.”
We recently reported that the second richest man in Egypt has put half his wealth in gold. Naguib Sawiris said, “The stock market is overvalued and I feel that another crash will happen.”
As US Global Investors CEO Frank Homes put it, whether you look at the short-term or the long-term, gold has done what it’s supposed to.
Since the year 2000, gold is two times the appreciation of the s&P 500. Two times! And last year it was up 13%. That’s not bad. So, I give you short-term or long-term – gold has done what it’s supposed to do in an overall portfolio against currency volatility … it de-risks an overall portfolio.”
Insurance and wealth protection are two reasons to own gold – no matter what the mainstream people tell you.
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